Exhibit 99.1

 

 

Tel-Instrument Electronics Reports Net Income of $908k for Third Quarter 2020

 

East Rutherford, NJ – February 13, 2020 – Tel-Instrument Electronics Corp. (“Tel”, or the “Company”) (OTCQB: TIKK), a leading designer and manufacturer of avionics test and measurement solutions, today reported net income of $908k ($0.25 basic income per common share) on revenues of $4.7 million for the third quarter of fiscal year 2020 ending December 31, 2019.

 

Highlights include:

 

 

Revenues increased 19% from last year’s third quarter and have reached $16 million over the last 12 months.

 

 

Gross margins remained solid at 46.7% due to manufacturing efficiencies, tight cost controls, and product mix.

 

 

Quarterly operating expenses remained constant at $1.2 million despite increased revenues and profit-sharing accruals.

 

 

Operating income increased to $1 million for the current quarter as compared to 758k in the year ago quarter.

 

 

Net income for the quarter increased to a $908k, or $0.25 basic income per share and $0.18 per share fully-diluted.

 

 

Nine-month net income improved to $1.7 million, or $0.45 basic income per share and $0.35 per share fully-diluted.

 

 

Trailing 12-month EBITDA improved to $2.7 million.

 

 

Shareholders Equity improved to $1.6 million as compared to a negative $83k at the start of the fiscal year.

 

 

Bookings for the quarter were $3.0 million (excludes a $1.87 million order received in the first week of January 2020).

 

Mr. Jeffrey O’Hara, Tel-Instrument’s President and CEO commented, “We are pleased to report strong operating results for the third quarter on revenues of $4.7 million. The increase in revenues has been driven by growing international sales, which accounted for over 50% of our revenues in the latest quarter. The Company continues to do an excellent job at managing operating expenses, which resulted in quarterly operating profits of just over $1 million. Net income for the quarter increased to $908k, or $0.18 per common share on a fully diluted basis. The Company has now recorded strong profitability for five consecutive fiscal quarters and we expect that this trend will continue for the remainder of the 2020 fiscal year and beyond. We are particularly pleased to have secured the $1.87 million T-47/M5 order from Muirhead Aerospace, our European distributor, for the U.K. military subsequent to the end of the third quarter. We expect the international Mode 5 test set business and orders for the F-35 program to remain strong for the next several years. We also continue to work with the U.S. Military and the major prime contractors on new programs, and we are in discussions with the U.S. military on an upgrade program that could generate revenues starting as early as the next fiscal year.

 

Our near-term goal is to capture the lion’s share of the Mode 5 test set market and continue strengthening our balance sheet and to set-aside sufficient cash to fully discharge the Aeroflex damage award in the event that we are unsuccessful with our pending legal appeal. We are well on our way to achieving this milestone with total liquid assets at December 31, 2019 increasing to $6.48 million ($3.67 million of cash and restricted cash plus $2.8 million of account receivables). Since the start of the current fiscal year, Tel’s net working capital position has improved from negative $152k to a positive $1.41 million. Shareholders Equity has also improved to $1.6 million as of the end of the latest fiscal quarter.

 

To meet the standards for the next generation of military applications, we are upgrading the design of our 4.5-pound SDR/OMNI hand-held test set to include a much faster processor with improved video graphics processing capability. This change will likely move the initial product introduction for the commercial avionics market into the middle of this calendar year, but we expect it will better position the Company for high dollar military contracts, which will be critical to our long-term growth in revenues and profitability. The goal of this new test set is to recapture market share in the commercial avionics test set business and expand into the much larger secure communications radio test market.

 

With respect to the Aeroflex litigation, the Company has appealed the $4.9 million judgement and has set aside $2 million in restricted cash to support an appeal bond. The appeal submissions are now complete. We continue to believe that the trial judge erred in his legal ruling on standing and other issues during the trial and that we have strong grounds for the award to be vacated or reduced.”

 

 

The following information was filed by Tel Instrument Electronics Corp (TIKK) on Wednesday, February 19, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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